The government has strongly denied holding any talks on revising the double tax avoidance agreement with Mauritius. Indian equity market has been witnessing a volatile bout of sell offs post news that India and Mauritius are in talks to revise the existing tax treaty.
Confirming the denial from finance ministry sources, CNBC-TV's Siddharth Zarabi (watch accompanying video) said the "news of such talks" originated on Friday itslef. While speaking about the advance tax collection, a CBDT (Central Board of Direct Tax) official mentioned in the passing that the Mauritius tax treaty was being looked into. "Here too, the reference point was treatment of blackmoney only," Zarabi said.
On the ground, there has been no formal meeting scheduled for renogotiation. For the last 10 years, the CBDT has been talking about the need to revise the exisiting tax treaty, but Maurituis has been refusing to alter it. In March 2011, a fresh attempt was made to alter the framework, but the move cannot be concluded as renogotiation of the tax treaty.